NEW YORK: Global stocks rallied yesterday, bolstered by China's pledge to help stabilise markets and another pullback in oil prices as the US Federal Reserve (Fed) announced its first interest rate increase since 2018.
Optimism over talks between Russia and Ukraine also buoyed equities, analysts said, even as Ukrainian President Volodymyr Zelensky implored US lawmakers for more help to counter Moscow.
Wall Street stocks capped a banner day for global equities, with the S&P 500 piling on more than 2% as the Fed escalated its battle against the wave of price increases battering the American economy.
The Dow Jones Industrial Average finished up 1.6% at 34,063.10. The broad-based S&P 500 gained 2.2% to 4,357.86, while the tech-rich Nasdaq Composite Index surged 3.8% to 13,436.55.
Earlier, Hong Kong's main equities index closed up more than 9% after Chinese state media said authorities would maintain capital market stability and adopt measures to handle risks for troubled property developers.
The news lit a fire under the Hang Seng Index, where mainland Chinese tech firms had been reeling from a sell-off this year fuelled by a government crackdown on the sector and fears about possible US sanctions if China were to help Russia in its war with Ukraine. It closed up 9.1% at 20,087.50.
Of the other major Asian bourses, Shanghai’s composite index gained 3.5% to 3,170.71, and Tokyo’s Nikkei 225 jumped 1.6% to 25,762.01.
European stocks closed at over two-week highs yesterday after fresh talks of compromise from Russia and Ukraine boosted gains spurred by China's promise to roll out more economic stimulus.
The pan-European Stoxx 600 index closed up 3.1%, at its highest level since Feb. 28.
London;s FTSE 100 gained 1.6% to 7,291.68, Frankfurt’s DAX surged 3.8% to 14,440.74, and the CAC 40 of Paris closed 3.7% higher at 6,588.64. Milan was up 3.3%.
MSCI's gauge of stocks across the globe gained 2.76%.
“Today has delivered a double-whammy of gifts for embattled markets,” said Chris Beauchamps, chief market analyst at IG.
“First the Chinese deputy PM hints at economic stimulus, providing a huge bounce for stocks there and giving the rest of the world hope that a sizeable economic package is on the way,” he said.
“As if that wasn’t enough, the Russians and Ukrainians appear to be making some progress towards a deal, including a ceasefire and Ukraine halting any lingering efforts to join Nato.”
Yesterday, however, Kyiv rejected Russian demands to impose neutrality on Ukraine, and Zelensky called on Washington and its Nato allies to impose a no-fly zone in an address to the US Congress.
“The positive disposition is being attributed to reports that Russia and Ukraine may be making progress toward some compromises,” said Briefing.com analyst Patrick O’Hare.
“Everyone has heard this before only to be subsequently disappointed with headlines later in the day that dispel such notions,” he said.